The most important factor to consider when starting to build a business is the target audience. You have to think of who would you want to cater to. Who are the communities that you may profit off of. Like for example if there is a school near you, you should know that students would be your target audience. You should start a business where students can buy materials from or a place they can study or even hang out around. I believe that if you studied your target audience, the first step of your business is already successful enough.
It is essential in any investment to thoroughly study the market, especially the targeted niche. In the example you provided, the investor should have to know what's his product in first place then look for the best location. This means if you want to sell pens, then you have to look to open your store near to a school or a university, not senting a store then search for should i sell depends on the location. This is an opposite logic.